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MORNIN’ JOE INTERNATIONAL
DISCUSSION QUESTIONS
1.
U.S. GAAP Term IFRS International Term
Statement of comprehensive income* Statement of comprehensive income
Balance sheet Statement of financial position
Interest expense Finance costs
2. The nature of an expense is how the expense
that expense. An example is wages expense.
3. If an expense is classified by function on
4. Under U.S. practice, the term “provision”
using a lower-of-cost-or-market valuation, IFRS
6. A biological asset is an agricultural asset, such
and valued using fair value. They can be sepa-
7. IFRS allow property, plant, and equipment
9. A reserve under IFRS denotes an element of
An example would be the revaluation reserve
10. Treasury stock need not be disclosed on an
often as the last item in the stockholders’
Mornin’ Joe International
IFRS ACTIVITIES
IFRS Activity 1
b. The most striking aspect of this income statement is the lack of detail. The
statement begins with “Turnover,” and the second line is “Operating profit.”
None of the operating expenses that appear in a GAAP statement, including
IFRS Activity 2
a. The statement of financial position (balance sheet) of LVMH is clearly ordered
differently than a U.S. company statement of financial position (balance
sheet) would be. On the asset side of the statement of financial position
Mornin’ Joe International
IFRS Activity 2 (Concluded)
For LVMH, the equities are listed first on the liabilities and equity side of the
statement of financial position (balance sheet). The liabilities are listed after
the equities. The liabilities begin with non-current liabilities, followed by
current liabilities. So again, the statement of financial position (balance sheet)
b.
LVMH Term Mornin’ Joe U.S. GAAP Term
Statement of financial position Balance sheet
c. The revaluation reserve is the adjustment to stockholders’ equity for accumu-
lated unrealized gains and losses from changes in fair market value for
Mornin’ Joe International
IFRS Activity 3
a. and b.
(1)
FIFO less
LIFO
(2)
IFRS Net
Income
(3)
(FIFO less LIFO)
Total Current Assets
(4)
IFRS Net Income Col. (2)
Reported Net Income
Exxon Mobil $21,348 $30,143 36% 99%
c. Exxon Mobil has the largest difference between FIFO and LIFO inventory
valuation as a percent of current assets. This is because Exxon Mobil has
d. A change to IFRS would cause Kroger’s net income to increase to 105% of its
LIFO-reported net income. This is the largest relative impact among the three
e. In periods of rising prices, net income reported under LIFO would normally
